“I don’t think there will be any significant changes in our relationship in the near term,” said Chung Fu-kuei (鍾福貴), president of Chunghwa Telecom’s data communication business group.

Rhythm & Hues’ branch in Kaohsiung is still leasing computing equipment from Chunghwa Telecom to generate its special effects, and the two companies are also working together on cloud-based applications, he said.

However, the future of the long-term technical cooperation between the two companies will depend on how the US parent company of Rhythm & Hues adjusts its strategy, Chung said.

He said he did not expect Chunghwa Telecom’s business to be greatly affected by whatever strategic changes the studio makes.

Rhythm & Hues’ Kaohsiung branch could not immediately be reached for comment.

The company is closed this week for the Lunar New Year holiday.

Chunghwa Telecom and Rhythm & Hues signed a memorandum of understanding in November last year to set up a joint venture to make Taiwan a cloud computing hub.

The project, called Cloud for Animation and Visual Effects, would play an important role in meeting the growing demand for cloud computing services in the global visual effects market, the companies said.

Chunghwa Telecom and Rhythm & Hues already have a data center in Taipei that they said will be used as the foundation of their joint venture.

The Los Angeles Times reported on Monday that Rhythm & Hues, which worked on Taiwanese director Ang Lee’s (李安) Life of Pi, is seeking bankruptcy protection from creditors.

The company is planning to lay off 200 employees at its Los Angeles studio because of difficulties meeting its payroll obligations, the newspaper reported, citing anonymous sources from the studio.